Are Brokers Ready to Rule Crypto?
Over the past few years, the cryptocurrency market has increasingly come to resemble traditional markets. As digital assets like Bitcoin gain institutional acceptance from large players within the traditional finance industry, a clear trendline is established: There will be greater convergence between traditional and crypto financial market players.
For evidence of this convergence, one needs to look no further than 2018’s crypto derivatives boom, where outstanding growth in demand–and by extension–liquidity have attracted the kinds of stalwart institutional investors that dominate traditional financial markets.
The crypto market has primed itself for this development. As the ecosystem has grown, some of the biggest players in the crypto space have been the cryptocurrency exchanges. Today, there are hundreds of digital assets exchanges within the crypto market. These exchanges connect buyers and sellers—exchanges that reach scale are able to increase their liquidity, which in turn attracts yet more buyers and sellers. As concentrated pools of liquidity emerge with the consolidation of cryptocurrency exchanges, the crypto market becomes fertile ground for brokerages to come in.
When it comes to traditional financial markets, online stock brokers and prime brokerages dominate when it comes to attracting retail and institutional clients. In total, the top brokerage firms hold trillions upon trillions of assets, along with millions of active accounts. Now that crypto exchanges offer more trading depth and liquidity, crypto brokers are uniquely positioned to enter and alter the crypto landscape, providing users with access to multiple exchanges, ensuring maximum liquidity for their customers.
They’re also positioned to provide all-in-one features that resonate with institutional investors, such as advanced trading tools and data analytics that help improve trading performance.
Binance recognizes the developing opportunities for crypto brokers, and seeks to prime the market for brokers who offer sophisticated trading services, as they will play an instrumental role in leading the professional development of the crypto market. Over the past year, Binance’s Link Program has identified over 200 crypto brokers who offer competitive crypto trading services.
Since the launch of our Link program, our partners have cumulatively brought in a growing portion of our overall trading volume on the Binance Exchange. Recently, the Link program saw a 300% quarterly increase in trading volume, signaling the present and growing demand for brokerage services.
Will crypto brokers fundamentally alter the crypto ecosystem and bring in a new class of institutional investors? Only time will tell, but if recent developments offer any indication, the crypto market could be on the cusp of true mainstream adoption.